Altius Golf and the Gighter Brand
1. Assess the forces eroding Altius’s market and financial position.
The most worrying trend for Altius was the declining interest in the sport.
There was a steep decline in the number of golfers post 2003 (Number of golfers in 2003 was at its peak). It had reduced from 31 million to 26 million in a decade. Due to the 2008 recession, people who played golf reduced their spending on golf balls, this has had a negative impact on the overall golf industry. The number of closures of golf courses outpaced the new course openings.
Altius accounted for 60% of the industry revenue prior 2008.The retail unit sales for Altius reduced from 38% to 35% between 2008 and 2012 whereas for its Competitor-Primiera, it increased from 14.2% to 17.1%.
Most of the on course outlets which promoted Altius were getting replaced by off-course retailers.
The gross margin gained by retailers was only 15% for Altius, and was 20% for other brands such as Primiera, Bantam, Carlsbad.
Altius’s golf balls were comparatively expensive. Hence new golf players were more inclined to buy other competitive brands which were priced lower than Altius.
Altius had built and maintained its leading share in the golf market by introducing generation after generation of advanced, super premium offerings so that consumers could emulate their favorite Professional golfers. But this strategy was countered by its competitors. Competitive Depositioning was done by Primiera when they began holding custom ball fitting sessions around the country. Meridian introduced non-confirming balls in order to make golf easier and more fun.
Product innovations, marketing campaigns, and competitive pricing helped other manufacturers chip away Altius’s market share.
All the above factors were responsible for eroding Altius’s market and financial position.
2. Should Altius implement the Elevate strategy?
a) If so, what are the risks to the brand and how can they be managed?
b) If not, what are the alternatives, assuming the board expects growth in the profit contribution from the golf ball line? How will these alternatives restore Altius’s market and financial position, and what are their advantages and disadvantages?
Altius should implement the Elevate strategy, in order to maintain sustainability, profitability and achieve scalability in the longer run. Due to the power of new entrants Altius should continuously evolve with the changing environments. It should emphasize more on the demand of its consumers.
By implementing the new strategy,